InterRent Real Estate Investment Trust
TSX : IIP.UN

InterRent Real Estate Investment Trust

August 15, 2008 06:00 ET

InterRent Real Estate Investment Trust Reports Record Revenues, Net Operating Income (NOI) and Funds From Operations (FFO) For Second Quarter of 2008

TORONTO, ONTARIO--(Marketwire - Aug. 15, 2008) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

InterRent Real Estate Investment Trust (TSX:IIP.UN) ("InterRent") today reported its financial results for the second quarter ended June 30, 2008.



Second Quarter Highlights from Continuing Operations

- Operating revenues increased 29.4% over 2007, to $8.4 million
- Net Operating Income (NOI) increased by 23.8% to $4.4 million from the
same period last year
- Funds From Operations (FFO) for the quarter was $1.38 million, up from
$1.37 million last year. FFO per unit was $0.08 per REIT unit compared to
$0.09 per REIT unit in the comparable quarter of 2007.
- Distributable Income for the quarter was $0.9 million, or $0.05 per REIT
unit compared to $1.1 million, or $0.07 per REIT unit last year.
- Same property, net revenues increased by 4.3% to $5.7 million and same
property NOI by 2.4% to $2.9 million, from June 30, 2007
- Incremental revenues from cable television, parking and laundry
operations rose by 22% to 3.05% of total revenues from 2.49% in the
second quarter of 2007.
- Occupancy levels rose to 96.9% compared to 96.3% last year
- Paid down its $50 million acquisition facility by $15.2 million,
replacing it with lower priced, long term first mortgages, and also paid
off $2.3 million in maturing first and VTB second mortgages.
- Subsequent to quarter end, credit facilities provided by two financial
institutions were increased from $4,479,000 to $9,483,000 at an average
interest rate of 1.23% above bank rime rate.
- Acquired two multi-residential apartment properties in Ottawa, Ontario
for $9.3 million.
- Subsequent to quarter-end the TSX accepted InterRent's normal course
issuer bid to purchase up to 874,552 units representing approximately
5.0% of units issued and outstanding
- The monthly revenue run rate for continuing operations based on July 1,
2008 occupancies was $2.9 million equating to $34.5 on an annualized basis


"The solid increases in our Operating Revenues and our Same Building Revenues and Net Operating Income (NOI) demonstrate InterRent's ability to maximize the value of our existing property portfolio, With strengthening residential rental market fundamentals, increased rents and occupancies we look forward to continued improvements in our operating results" said Michael Newman, Chief Executive Officer.



Financial Results
Results from Continuing Operations for:
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Quarter Ending June 30, Quarter Ending June 30,
2008 2007
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Operating Revenues $ 8,443,000 $ 6,523,000
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Operating Expenses 4,017,000 2,948,000
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Net Operating Income (NOI) 4,426,000 3,575,000
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Financing Costs 3,256,000 1,775,000
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General and Administrative
Costs (G&A) 668,000 521,000
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Amortization 2,265,000 1,522,000
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Net (Loss) (1,763,000) (243,000)
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Funds From Operations (FFO) 1,380,000 1,370,000
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FFO per Unit 0.08 0.09
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Distributable Income (DI) 857,000 1,142,000
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DI per Unit 0.05 0.07
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Weighted Average Units O/S 18,115,951 15,776,094
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Results for the Three Months Ended June 30, 2008

Operating revenues for the three months ended June 30, 2008 were $8.4 million compared to $6.5 million in the second quarter of 2007, an increase of 29.4%. The increase was due primarily to the acquisition of income-producing properties made during 2007.

NOI increased by 23.8%, to $4.4 million, during the second quarter of 2008, from $3.6 million in the second quarter of 2007.

Net same property revenues grew by 4.3% to $5.7 million, from $5.4 million in the second quarter of 2007. Same building NOI increased by 2.4% to $2.92 million, from $2.86 million in the second quarter of 2007.

Funds from operations increased marginally, to $1.38 million from $1.37 million in the second quarter of 2007. Funds from operations per unit declined to $0.08 per unit from $0.09 per unit in the second quarter of 2007, as a result of a greater number of REIT units issued and outstanding.

Distributable income was $0.9 million compared to $1.1 million in the second quarter of 2007. Distributable income per unit was $0.05 per unit compared to $0.07 per unit in the second quarter of 2007 partly as a result of a greater number of REIT units issued and outstanding.

Operating costs were $1.5 million or 18.1% of revenue for the three months ended June 30 2008, compared to $1.0 million for the three months ended June 30, 2007. The difference in operating costs year over year was due to uncollectable accounts being underestimated in the second quarter of 2007.

Property taxes for the second quarter of 2008 were $1.4 million, or 16.1%, of revenue, compared to $1.0 million, or 16.1% of revenues in the second quarter of 2007.

As a percentage of revenue, G&A costs decreased slightly to $0.7 million or 7.9% of revenue, from $0.5 million or 8% or revenue in the second quarter of 2007.

Financing costs were $3.3 million, or 38.5% of revenue for the quarter, compared to $1.8 million or 27.2% of revenue for the comparable period last year. The increase in financing costs was due mainly to interest costs on the $25 million convertible debenture and the associated charge for the accretive portion of debenture interest.

Utility costs represented 13.4% of revenue, or $1.1 million for the three month period ended June 30, 2008, compared to 14% of revenue, or $0.9 million for the same period in 2007, representing a decline of 4.3%.

Vacancy rates for the quarter declined across the entire portfolio to 3.1%, from 3.7% in the second quarter of 2007.

Results for the Six Months Ended June 30, 2008

Operating revenues increased 55.7% to $16.7 million, from $10.7 million for the six months ended June 30, 2007. The increase was due primarily to acquisitions of income-producing properties in 2007.

NOI was $7.9 million, representing an increase of $2.7 million or 41% from $5.2 million, over the same period last year.

Total operating expenses increased to $8.8 million from $5.6 million for the period ended June 30, 2007.due to the larger size of the portfolio.

Funds From Operations grew to $1.8 million during the six months ended June 30, 2008, from $1.4 million for the period ended June 30, 2007. Funds From Operations per unit were $0.10, compared to Funds From Operations per unit of $0.11 for the six months ended June 30, 2007.

Distributable income was $0.9 million compared to $1.1 million during the six months ended June 30, 2007. Distributable income per unit was $0.05 from $0.08 per unit for the six months ended June 30, 2007.

Conference Call and Webcast

Management will hold a conference call and live audio webcast on August 15, 2008 at 10:30 a.m. ET to discuss InterRent's second quarter performance. The call may be accessed by dialing 416-644-3418 or 1-800-732-9307. The webcast will be accessible at www.interrentreit.com. A replay of the call will be available until midnight on August 22, 2008. It can be accessed by dialing 416-640-1917 or 1-877-289-8525 and entering the passcode 21278200#.

(i)Non-GAAP Measures

InterRent REIT assesses and measures segmented operating results based on performance measures referred to as "Funds From Operations" ("FFO") and Distributable Income ("Dl"). Both FFO and DI are widely accepted supplemental measures on the performance of a Canadian real estate investment trust; however, they are not measures defined by Canadian generally accepted accounting principles ("GAAP"). The GAAP measurement most comparable to FFO and DI is total cash flow from operating activities and net earnings. FFO and DI, however, should not be construed as an alternative to net earnings or cash flow from operating activities determined in accordance with GAAP as indicators of InterRent REIT's performance. In addition, InterRent REIT's calculation methodology for FFO and Dl may differ from that of other real estate companies and trusts and therefore readers should not place reliance on these measures.

About InterRent

InterRent is a rapidly expanding, growth oriented real estate investment trust engaged in building unitholder value through the accretive acquisition, ownership and operation of strategically located income producing multi-residential real estate. InterRent currently owns and operates 4,012 apartment suites across Ontario, with 85 of those classified as "Properties Held For Resale". For additional information visit www.interrentreit.com.

Forward Looking Statements

This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "anticipated", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". InterRent is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements contained in this release. A full description of these risk factors can be found in InterRent's publicly filed information which may be located at www.sedar.com. InterRent cannot assure investors that actual results will be consistent with these forward looking statements and InterRent assumes no obligation to update or revise the forward looking statements contained in this release to reflect actual events or new circumstances.

The TSX Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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